Exhibit S
WYNNCHURCH CAPITAL PARTNERS, L.P.
WYNNCHURCH CAPITAL PARTNERS CANADA, L.P.
Two Xxxxxx Park
000 Xxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
November 14, 2002
Fleet Capital Corporation
Xxx Xxxxxxx Xxxxxx
Xxxx Xxxx XX XX 00000X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxxxx
Ladies and Gentlemen:
Reference is made to (i) the Credit and Security Agreement dated
as of January 31, 2002 (as heretofore amended, supplemented or
otherwise modified, the "Credit Agreement") among Alternative
Resources Corporation, ARC Service, Inc., ARC Solutions, Inc.,
ARC Midholding, Inc., Writers Inc., as co-borrowers (the
"Borrowers") and Fleet Capital Corporation, as lender (the
"Lender"), (ii) the Subordination and Intercreditor Agreement
dated as of January 31, 2002 (as heretofore amended, supplemented
or otherwise modified, the "Subordination and Intercreditor
Agreement") among Wynnchurch Capital Partners, L.P., Wynnchurch
Capital Partners Canada, L.P. (collectively, "Wynnchurch"), the
Borrowers and the Lender, and (iii) the Third Amendment to Credit
Agreement and Waiver dated as of November 14, 2002 among the
Borrowers and the Lender (the "Third Amendment"). Unless
otherwise defined herein, capitalized terms used herein as
defined terms have the meanings ascribed thereto in the Credit
Agreement.
Wynnchurch acknowledges that (i) an Event of Default has occurred
and is continuing under the Credit Agreement as a result of the
Borrower's failure to have the minimum Tangible Capital Base
required by Section 8.10(a) of the Credit Agreement for the
fiscal quarter ended September 30, 2002 (the "September 30, 2002
Event of Default"), and (ii) pursuant to the Third Amendment, the
Lender has agreed to waive the September 30, 2002 Event of
Default and to amend certain provisions of the Credit Agreement
as more fully set forth in the Third Amendment. Wynnchurch
further acknowledges that the execution and delivery by
Wynnchurch of (x) a written waiver with respect to the existing
defaults of the Borrowers under the Subordinated Debt Documents
and the amendment of the financial covenants set forth in the
Subordinated Debt Documents, and (y) this acknowledgement letter,
are conditions precedent to the effectiveness of the Third
Amendment.
Accordingly, to induce the Lender to enter into the Third
Amendment and to enable the Borrowers to satisfy the conditions
precedent to the effectiveness of the Third Amendment, Wynnchurch
hereby (i) confirms that Wynnchurch has executed and delivered to
the Borrowers a written amendment and waiver with respect to the
existing defaults under and financial covenant provisions
contained in the Subordinated Debt Documents, (ii) executes and
delivers to the Lender this acknowledgement letter, and (iii)
further covenants and agrees that notwithstanding anything to
contrary contained in the Wynnchurch Subordinated Notes, any
other Subordinated Debt Document, the Credit Agreement, the
Subordination and Intercreditor Agreement or any other Loan
Document, the Borrowers shall not be required to pay to
Wynnchurch, and Wynnchurch shall not accept from the Borrowers,
any cash payments of interest owed with respect to the Wynnchurch
Subordinated Notes for any period from and after June 1, 2002
unless and until such time as the Lender receives from the
Borrowers a Compliance Certificate for the fiscal quarter of the
Borrowers ending December 31, 2002 or any subsequent quarterly
period, demonstrating that immediately prior to and after giving
effect to each contemplated cash payment of interest in respect
of the Wynnchurch Subordinated Notes, no Event of Default shall
have occurred and be continuing under
the Credit Agreement and the Borrowers shall be in full compliance
with the financial covenants set forth in the Credit Agreement,
as amended by the Third Amendment.
Very truly yours,
WYNNCHURCH CAPITAL PARTNERS, L.P.
By: Wynnchurch Partners, L.P., its
general partner
By: Wynnchurch Management Inc., its
general partner
By:/s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: President
WYNNCHURCH CAPITAL PARTNERS
CANADA, L.P.
By: Wynnchurch Partners Canada,
L.P., its general partner
By: Wynnchurch GP Canada, Inc.,
its general partner
By:/s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: President
ACKNOWLEDGED AND AGREED:
ALTERNATIVE RESOURCES CORPORATION,
individually and on behalf of the
other Borrowers
By:/s/ Xxxxxx Xxxxxxx
------------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
